The Congressional Agenda for October

In contrast to the September work period, when a number of must-pass measures and a last-ditch (and eventually unsuccessful) effort to repeal the Affordable Care Act topped the congressional agenda, the three-week October session is likely to see Republican leaders in the House and Senate try to advance one of their central policy goals: comprehensive tax reform. With little to show in the way of legislative success during the first nine months of Republican control of all the levers of power in Washington, Republicans take up tax reform needing a success before they head into an election year, when, if history is a useful guide, it will become even more difficult to advance major legislation. With fewer timely bills facing Congress, the agenda of both chambers beyond the tax reform bill and the closely related action on each chamber’s budget resolution is less certain than September’s agenda.

Last week, the White House and Republican congressional leaders released a nine-page tax reform “framework” intended to initiate the development of actual legislative text during the coming weeks. According to press reports, House Majority Leader Kevin McCarthy has told his colleagues he wants the House to pass tax legislation by the end of this month, a goal the White House has echoed with the additional expectation that the Senate complete its work by the end of November. Many members within the GOP conference are wary of this ambitious timeline given the complexities of the issue, the lack of detail in the tax reform framework, and the arduous task of turning a broad outline into legislation that Republicans can unite behind.

Even as the relevant committees undertake the work of developing the tax legislation, both chambers are aiming to tackle a budget resolution for Fiscal Year (FY) 2018. Adoption of a budget resolution by both chambers is a necessary precondition for reconciliation, a parliamentary tool that will allow any eventual tax reform bill to pass the Senate with a simple majority, rather than the traditional cloture-proof 60-vote threshold. One initial obstacle to both adoption of a budget resolution and the subsequent consideration of tax reform has already been avoided after the conservative House Freedom Caucus members publicly endorsed the nine-page proposal and signaled they would vote for the budget resolution previously reported by the Budget Committee to the full House, but leadership may have more work to do in locking down votes from more moderate members of the conference.

The House of Representatives will kick off the process this week, with its FY 2018 budget resolution scheduled for floor consideration. While the congressional budget resolution is not signed into law by the President, once adopted by both chambers it serves as an agreement between the House and Senate on a budget framework for any spending or revenue legislation moving forward. The House FY 2018 measure, approved by the House Budget Committee in July, would balance the budget in ten years by proposing cuts to domestic spending, especially for mandatory programs. It sets overall discretionary spending for fiscal year 2018 at $1.132 trillion: $621.5 billion in defense discretionary spending and $511 billion in non-defense discretionary spending (which reflects the discretionary spending in the House-passed appropriation bills). These levels exceed the spending caps established by the 2011 Budget Control Act (BCA). The resolution also contains reconciliation instructions for the tax reform bill. Because the budget resolution does not become law, its adoption, even by both chambers, cannot vitiate or increase the BCA budget caps. Adoption of the resolution will set the stage for negotiations to raise the BCA caps (something that is likely necessary to finalize the appropriations process for the fiscal year), and it would be in those negotiations that Democrats, especially in the Senate where legislation increasing the caps is subject to a filibuster, would wield significant influence.

The Senate Budget Committee is tentatively scheduled to mark up its own budget resolution this week, following a deal among Republican members over the size of a potential tax cut. Following a Budget Committee markup, the Senate is expected to consider the budget resolution on the floor (where it is not subject to a filibuster) during the week of October 16, after the chamber returns from a scheduled week-long recess. The ability of a deeply divided Senate with a tenuous Republican majority to pass its budget resolution is uncertain, but Senate Republican leaders will be working hard to shore up the members of the conference, knowing the success of tax reform hinges on the ability to adopt a budget. And perhaps a small number of Democrats running in states won by President Trump last year might be induced to support the budget resolution, though that is a long-shot. Assuming each chamber is able to pass its budget resolution, they would then move to a conference to negotiate a final budget resolution that both chambers would have to adopt. If Republicans achieve that success, they will have secured a path forward on tax reform; if they fail, their efforts to enact tax reform legislation are also unlikely to succeed.

The work on a budget resolution in the Senate, paired with the passage of a continuing resolution keeping the government funded through December 8, has reduced pressure on the Senate Appropriations Committee to complete its work on the remaining four annual appropriations bills for FY 2018, and further activity is uncertain without an agreement on the BCA budget caps. But the appropriators are not likely to be sitting idly. During October congressional leaders may well assemble and take up another disaster relief measure for the states and territories affected by Hurricanes Harvey, Irma, and Maria. President Trump already signed into law an initial $15 billion relief bill seen merely as a first installment of hurricane relief, and further assistance for those affected by Harvey as well as from the subsequent storms, Hurricanes Irma and Maria, is necessary. Further assistance to victims of western fires may also be in the offing. Congress will need a request for additional disaster relief from the White House. Given the scope of the damage and its wide geographic distribution, an interim request may be coming this month, but if so it is not likely to be the final request for disaster relief.

One funding deadline neglected by Congress during the September work period was renewal of the Children’s Health Insurance Program (CHIP), but action on reauthorization may take place in the next several weeks. CHIP lapsed at the end of the fiscal year, September 30; however most states are expected to have enough leftover funds to continue running the program for some period of time. The popular program, which enjoys broad, bipartisan support, is a major source of healthcare coverage for children nationwide, providing insurance to more than 8 million children from low and middle-income families. Funding was last reauthorized by Congress in 2015, by a vote of 392–37 in the House and 92–8 in the Senate. Despite the bipartisan support, legislation has yet to advance out of the committees of jurisdiction in either chamber. Senate Finance Committee Chairman Orrin Hatch (R-UT) and Ranking Member Ron Wyden (D-OR) recently introduced a bill, S. 1827, the Keeping Kids’ Insurance Dependable and Secure (KIDS) Act, to renew CHIP for five years. The bill includes several provisions that were instituted through the Affordable Care Act (ACA). The Senate Finance Committee has yet to mark up the bill. On the other side of the Capitol, the House Energy & Commerce Committee plans to mark up this week a package that includes CHIP reauthorization as well as renewal of the program for federally qualified health centers (which also expired on September 30) and Medicare extenders that are scheduled to expire in December. One of the major obstacles for advancing a bill in either chamber is identifying offsets necessary to pay for the programs’ renewal. Given the current dynamic surrounding the healthcare debate and repeated Republican efforts to repeal the ACA, there is also potential for any healthcare-related legislation to be threatened by attaching unrelated Obamacare repeal provisions to the underlying bill.

Another issue confronting Congress but unlikely to come to the floor in October is the announcement last month that the administration would phase out the Deferred Action for Childhood Arrivals (DACA) program initiated by President Obama. The administration will end the program in March 2018, giving Congress six months to move legislation to authorize a similar program. DACA allowed persons who are in the country illegally but were brought here by their parents when they were children to remain in the country and work, serve in the armed forces, or attend school. While there is widespread and bipartisan public support for DACA beneficiaries, there will likely be partisan splits over whether to authorize the program by law and, if so, what add-on enforcement provisions will Republicans insist on in order to provide legal status to the DACA population and will those add-ons prevent the Democrats from supporting the legislation, which could kill it in the Senate. Speaker of the House Paul Ryan has formed a working group in the House of Representatives, tasked with developing a viable proposal on the issue, and Senate Republicans have also reportedly established a working group to draft their approach. Meanwhile, the White House is reportedly developing principles it wants to see in a DACA bill. Congress has until next March to act, but with no evident legislative vehicle likely in the first quarter of next year, a successful resolution of the issue is likely before the end of this year.

Behind the scenes, leaders of the Armed Services Committees are expected to convene a conference committee to negotiate the FY 2018 National Defense Authorization Act (NDAA). The annual authorization bill sets Department of Defense policy and authorizes Pentagon spending levels for the year ahead. In July, the House passed a $696 billion bill while the Senate passed a $700 billion package in mid-September. Aside from their marginally different topline allocations, the House and Senate bills diverge slightly on policy and when passed by their respective chambers both exceed some of the budget and capability levels requested by President Trump. Perhaps the biggest roadblock to successful conference committee negotiations is finding a way around the spending cap stipulated by the 2011 BCA, which sets the Pentagon base budget as no higher than $549 billion. But as noted, there will be negotiations about the BCA caps, and the defense allotment is sure to be front and center of those talks.

Also in the national security arena, both chambers are gearing up to address the expiring surveillance authority of section 702 of the Foreign Intelligence Surveillance Act. The administration has requested that the provision be extended permanently and without change. The House Judiciary Committee has circulated a working draft that would incorporate some additional civil liberties protections and renew the program for another five years. Press reports indicate that a bipartisan group of senators from the Judiciary and Intelligence Committees are beginning to work on their own renewal. The authority, which expires at the end of the year, is considered by the intelligence community to be a pillar of U.S. counter-terrorism efforts. The program is, however, controversial with privacy and civil liberties advocates, and the ultimate resolution of the debate is not likely until closer to the program’s expiration.

In addition to these matters, the Senate is also expected to continue its consideration of executive and judicial nominees during periods in between floor consideration of legislation.